In times of automation, job creation biggest challenge: ET India Leadership Council

MUMBAI: Job creation is the number one challenge for India at a time when digitisation and automation are disrupting traditional roles across all sectors, panellists at the ET India Leadership Council said. The India Leadership council is an exclusive peer group platform working towards bringing change in the country's business environment.

Speaking at the inauguration, Times Group MD Vineet Jain said, "I am confident that ILC holds the potential to knit the business fraternity together and create ‘Change’ that will be impactful at multiple levels. Together, we will also enlist the brightest minds, thought leaders, senior academicians and visionaries, as we seek to create the next wave of leaders by encouraging conversations around macro issues like capacity building, innovation and digitisation."

One very real challenge is disruption due to automation — which will have to be dealt with by finding new opportunities in areas like design, innovation and creativity, they suggested. Digitisation has already replaced many manual jobs and will continue to do so but there are also new avenues opening up where a different set of skills will be required, the panel felt.

For instance, the banking sector has already seen an impact due to automation, which is forcing it to change the way bankers work.

“Today the alliances-relationship technology model of a business has been disturbed. We will have to create an economy led by design, innovation, creativity and entrepreneurship (DICE) to bring about a transformation,” Rana Kapoor said.

Besides banking, another sector grappling with change led by automation is information technology (IT). Falling margins, a changing political environment and automation are forcing these companies to innovate or shed jobs. Marico chariman Harsh Mariwala said flexible labour policies are crucial if companies are to continue to invest. “Labour reform is a state subject.

But in spite of many states being ruled by the NDA government, we have not seen labour reforms taking place in states. There is clearly a hesitation in bringing about radical reforms. What the industry needs now is flexibility in employment so that in case of a downturn, the workforce can be reduced. Otherwise, it tempts you to invest in capital and equipment,” Mariwala said.

However, BCG Asia Pacific chairman Janmejaya Sinha said flexibility will prevail if it is rewarded accordingly. “It is important that flexibility in employment is rewarded, in which the flexible workers are taken care of, given appropriate health insurance etc, so it is not a win-loss situation for people engaging in flexible ways of employment and it is a fair and just process,” he said.

Amazon country manager Amit Agarwal who has recently been promoted to the position of global vice-president, however, said internet has created a unique method of job creation in non-linear ways.

“Amazon has created close to 1,50,000 jobs in India in the last four years and that has happened because of non-linearity. It was not because of a law that enabled us to do this. It happened because internet, when left barrier-free, lets people innovate,” Agarwal said defending the ecommerce sector which he said should not be judged so early for its potential.

There are some areas somewhat immune to effects of automation, the panel felt. “There are three sectors, namely tourism, housing and agriculture and associated sectors, that will not be affected either by automation or lack of labour reforms,” Mariwala said.

The government with its various skilling programmes is trying to bridge the gap between eligibility and employability. The panel felt that while some good ideas have been developed on this front, implement is lagging ideation, and regulation needs to be closely looked at in this area.

Several people ET spoke with about Ericsson’s India operations, including its current and former employees, said the Stockholm-based firm has reduced headcount in the last one year or so across functions, in line with its global restructuring.